This bill would completely eliminate 14 school districts out of 27 from receiving P.L. 874 entitlement for next year. There are 5,223 federally connected students in these 14 school districts. The 14 school districts are as follows:

My Congressional District is primarily a rural area and; therefore, the total assessed valuation per school pupil is very low. In order to provide the kind of educational program needed it has been necessary for the School Districts to exceed the statutory maximum tax by the voters approving an override tax. Total tax rates per $100 of assessed value are as follows:

There are certain features of this Bill that I would like to point out to you at this time that would be very detrimental to School Districts in California.

First, Section 12 subsection (b) requires that a School District is required to absorb costs relative to an adjusted number of Federal impact pupils equal to 1,000 or 3 per cent of its adjusted number of non-Federal impact pupils, whichever is the lesser.

I think this absorption is very unjust particularly after you have had to adjust the Federal pupil count by 40 percent or 20 percent whichever the case might be. This adjustment is a double penalty and consequently is the reason why 14 of my School Districts will receive no P.L. 874 funds under this Bill.

Second, Section 13 of the Bill is designed to assist School Districts where more than 50 percent of the students are federally connected. Subsection (a) prevents a School District from applying under Section 12 if the district is eligible for assistance under section 13. A number of School Districts in California have computed their entitlement under both section 12 and 13 and in each situation the entitlement is less under section 13. I feel that surely we should not enact a Bill that would penalize a district that happens to have a very high concentration of Federal impact pupils. The least that we could do is to let the School District apply under section 12 or 13 whichever is best for the district.

Third, Section 3 would cost the School Districts of California more than $27 million in State support each year by repealing that section of the 1968 Vocation Education Act that prohibits the State from reducing_State support to a school district due to the fact that said district receives P.L. 874 funds. For many years California did reduce the State's contribution to local school districts by as much as 25 per cent of the P.L. 874 entitlement..

A number of school districts have combined to file a claim against the State of California for withholding these funds. These districts have won their case in two levels of Court and the case is now waiting for a hearing before the California Supreme Court.

Millions of dollars are being held in impound by the State waiting for a final decision of the Supreme Court. If Section 3 of this Bill is enacted into law many California School Districts will suffer a severe loss.

Fourth, Section 17 makes provision for adjustments in the event appropriations are insufficient to pay full entitlements. The priority system set up under this section leaves much to be desired. I fail to see the difference between students of military parents who attend school on George Air Force Base, Adelanto, California or students of military parents who attend school on the base at Fort Knox, Kentucky or other such bases.

Under Section 17, Fort Knox and other such schools would receive their funds and what remains would first go to other school districts that qualify under Section 13 and then to districts under Section 12 with 3(a) pupils. Any remaining funds would be applied to all other entitlements on a pro rata basis. It is my feeling that if funds are insufficient to pay full entitlement that whatever funds are available they should be distributed on a pro rata basis straight across the board.

Mr. Chairman, I hope that my testimony will be helpful to you and Members of the Commtitee in considering the continuance of Public Law 874. I believe that the data speak for themselves and demonstrates the fact that California School Districts are critically in need of this Federal financial assistance, and that this Bill will jeopardize the educational program in hundreds of school districts, affecting a large percentage of the total number of pupils in California.

I sincerely believe that the Federal Government has an obligation in respect to the Federal activities being carried on in California and are wholeheartedly in support of the obligation accepted by the Federal Government to provide continued support under Public Law 874 and; therefore, desire to see the principles therein embodied continued.

In conclusion, I would like to thank the Committee for the privilege of appearing before you this morning in behalf of the Impact Aid Program.

STATEMENT OF HON. JERRY L. PETTIS, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF CALIFORNIA

Mr. PETTIS. Thank you, Mr. Chairman. You are most generous. and I appreciate the opportunity to appear before the committee

this morning to discuss the implications of this legislation, not only to my district but also to the State of California, as I look at it. And to begin with my own state, California, as you know, has an estimated entitlement of about $109 million under the present law. If this legislation is enacted, California's entitlement would be cut to $56 million, which is a decrease of approximately 49 per cent. California school districts could not take this kind of a cut and not suffer very serious consequences.

I would like to discuss with you what will happen to the school districts in my own Congressional district if this legislation were to pass, because I think it is illustrative of the problem that exists not only in my own Congressional district but in Congressional districts throughout the nation. I think that my district is probably fairly typical.

We hear these reiterations of some districts that are getting impact aid which are very wealthy districts and it is federal subsidy to communities where the average income is fantastically high. Well, this is not typical of the Congressional districts of the United States. It may be a situation which exists here or there in the country, but it is certainly not typical.

In my own district, there are 27 school districts which receive P. L. 874 funds, and there are approximately 178,526 students enrolled in these school districts, of which 25,479 are Federally-connected students.

I don't recite each district, but you will find in my prepared statement a roster of those school districts. The data, I think, are very interesting and illustrative of the problem we face.

I would like now to go to page 4, Mr. Chairman, if you are taking a quick look at those figures, and comment that this bill would completely eliminate 14 districts out of 27 from receiving any P. L. 874 entitlements for next year. There are 5,223 Federally-connected students in these 14 school districts. I have listed these particular districts, which don't mean anything particularly to the committee, but I think they are typical of communities throughout the nation.

My Congressional district is primarily a rural area, and therefore the total assessed valuation per school pupil is very low. In order to provide the kind of educational program needed, it has been necessary for the school districts to exceed a statutory maximum tax by the voters approving an over-riding tax. The total tax rates per $100 of the assessed value are as follows: You will note that these are much higher than national averages, and particularly urban averages. There is a limit to what people in these rural areas can afford to pay for education and particularly those people who live near military bases or areas where there are high number of federal employees. Many of these are rather migrant, I might add, particularly out in the State of California.

There are certain features of this bill that I would like to point out to you at this time that would be very detrimental to the school districts of California. First, Section 12 subsection (b) requires that a school district is required to absorb costs relative to adjusted number of Federal impact pupils equal to one thousand, or three per cent of its adjusted number of non-Federal impact pupils, whichever is the lesser.

I personally think this absorption is very unjust, particularly after you have had to adjust the Federal pupil count by 40 percent or 20 per cent, whichever the case might be. This adjustment is a double penalty and consequently is the reason why 14 of my school districts will receive no P. L. 874 funds under this legislation.

Secondly-and to me this is one of the real serious problems of this legislation-Section 13 of this bill is designed to assist School district where more than 50 per cent of the students are Federallyconnected. Subsection (a) prevents a school district from applying under Section 12, if the district is eligible for assistance under Section 13.

Now, a number of school districts, a rather large number of school districts in California, have computed their entitlement under both Sections 12 and 13, and in each situation the entitlement is less under Section 13. I feel that surely we would not enact a bill that would penalize a district that happens to have a very high concentration of impact pupils. The least we could do is let the school district apply under Section 12 or Section 13, whichever is best for the district, and not deny it that choice.

Third, Section 3 would cost school districts of California more than $27 million in state support each year by repealing that section of the 1968 Vocational Education Act that prohibits the state from reducing state support to a school district due to the fact that said district receives P. L. 874 funds. For many years, California did reduce the state's contribution to local school districts by as much as 25 percent of the P. L. 874 entitlement. A number of school districts have combined to file a claim against the State of California for withholding these funds. These districts have won their case in two levels of court to date, and the case is now awaiting a hearing before the California Supreme Court.

Millions of dollars are being held in impound by the State waiting for a final decision of the Supreme Court. If Section 3 of this bill is enacted into law, many California school districts will suffer a severe loss as a result of the circumstances I have just described.

Fourth, Section 17 makes provision for adjustments in the event appropriations are insufficient to pay full entitlements, and, to me, there is an inequity here. The priority system set up under this section leaves much to be desired. I fail to see the difference, for example, between students of military parents who attend school on George Air Force Base at Adelanto, California, which is out in the middle of the desert in California, or students of military parents who attend school on the base at Fort Knox, Kentucky, or other such bases. Under Section 17, Fort Knox and other such schools would receive their funds and what remains would first go to other school districts that qualify under Section 13, and then to districts under Section 12 with 3(a) pupils. Any remaining funds would be applied to all other entitlements on a pro rata basis. It is my feeling that if funds are insufficient to pay full entitlement, that whatever funds are available they should be distributed on pro rata basis across the board.

Mr. Chairman, I hope that my testimony today will be helpful to you and members of the committee in considering the continuance of Public Law 874. I believe that the data speak for themselves and demonstrate the fact that California school districts are critically in

need of this federally financial assistance and that this bill will jeopardize the educational program in hundreds of school districts, affecting a large percentage of the total number of pupils in the State of California.

I sincerely believe that the Federal government does have an obligation in respect to the federal activities being carried on in my home state, and am wholeheartedly in support of the obligation effected by the Federal Government to provide continued support under Public Law 874 and therefore desire to see the principles therein embodied continued.

In conclusion, I would like to thank you, Mr. Chairman, for the privilege of appearing before you this morning in behalf of the Impact Aid Program. If you have any questions that you would like to ask, I will do my best to try to answer them.

Mr. PUCINSKI. Thank you very much, Congressman Pettis. I think the committee will agree that this is one of the finest statements that we have had presented to the committee. It is obvious that you know your subject well. You have done your homework well. You have shown us specifically how it is going to affect the individual school districts of your Congressional district, which is the kind of material that we need to make a judgment.

As you know, the proposal before us would drop about 2,000 of the existing 4,300 school districts that are now receiving impact money. I think there is a particularly telling aspect of that part of your testimony which shows what this would do to California as a whole. I can't help but feel that if this legislation were to be approved in its present form, we could have to declare California a disaster

area.

Mr. PETTIS. That is right.

Mr. PUCINSKI. There is no question about that. I think that California would be hardest hit of all the states.

Mr. PETTIS. That is very true.

Mr. PUCINSKI. I am grateful to you for giving us the 14 districts that actually would be dropped form participation. And one might argue that the Alta Loma school districts, with only 112 students, really would not suffer too much; but my judgment is, that when you look at their budget, that the 112 students make a difference between keeping teachers on the pay-roll and not keeping teacher on the pay-roll.

As we go through the list here, we find that a Colton school district with 795 I imagine would really feel it very severely. I was wondering, I noticed the Ontario-Montclair district with 1,284. You say that would be dropped also?

Mr. PETTIS. I am not as concerned about a community like Ontario or Upland as I am with Alta Loma or Colton, communities that are depressed already. Alta Loma, for example, is a very rural community with a very low tax base, and so you compound this. And take another community that I have mentioned in my testimony, Adelanto. If you were to take away this entitlement to Adelanto, you would bankrupt the community because there are only five or six hundred people in the community and you have all of these thousands of Air Force students. They can't carry this. They can't carry another ten cents or fifty cents and, in fact, they are really pulling